Electric Power Steering System Market

The electric power steering system market is driven by factors such as road accident deaths and increase in sale of EV and luxury vehicles. However, high cost is expected to restrain market growth. Rising adoption in developed countries is expected to create opportunities for the market players.

The rise in the number of road accidents and deaths are a major global concern. According to the World Health Organization (WHO), in 2017, more than 1 million people were killed, and more than 50 million people are estimated to be injured on roads. Every year, due to bad road conditions, 90% of the road traffic deaths occur, primarily in the developing countries, rear-end collisions being one of the most prominent types of accidents. According to the World Road Statistics 2018, India ranks 1st in the number of road accident deaths across 199 countries reported in the World Road Statistics followed by China and the US. As per the WHO Global Report on Road Safety 2018, India accounts for almost 11% of the accident-related deaths in the World. The US National Highway Traffic Safety Administration (NHTSA) reported almost 2.4 million rear-end collisions on the US roads in 2016, including almost 700,000 crashes, resulting in injury and about 2,300 fatal rear-end crashes.

A road accident may cause a loss of life/lives or grievous injury and minor injury to road users. The accident usually causes the neck to snap, quickly. Other kinds of injuries due to the collisions include mild neck strain and dislocation of vertebrae bones of the spine. Such scenarios related to the road accidents and neck injuries in vehicles raise concerns regarding the driver’s safety, worldwide.

The car without power steering is more tends towards road incident, the electric power steering is becoming key important system is for modern driving. Electric power steering assist in easier operation of steer than other types of steering system, also lowers the risk of steering failure hence reducing road accidents. Electric power steering plays a significant role when it comes to the safety and agility of passenger vehicle, which has further increased their application in most of the passenger vehicle. This makes the electric power steering system, a critical aspect in ensuring safety and comfort, which is expected to result in the growth of the global electric power steering system market during the forecast period.

The demand for the electric power steering system is limited in certain regions where the cost of the vehicle is still a more prominent factor than the safety of driver and safety of the vehicle. However, the scenario is changing with a rise in the number of road accidents and awareness regarding vehicle safety. Such a change is expected to shift the impact of road accident deaths on the global electric power steering system market from moderate to high over the forecast period.

The growth of the automotive industry and rise in technological advancements in the automotive industry are the major factors expected to promote electric power steering system in developed countries. According to an automotive consumer study conducted by Deloitte, 68% of consumers in the US feel that increasing accident numbers of autonomous vehicles without electric power steering system has made them more cautious of this technology. internet of things (IoT) and artificial intelligence (AI) technologies will continue to revolutionize the automotive sector in the US. Device connectivity, autonomous driving, electric powertrains, and shared mobility are also the latest trends which will lead to the demand of electric power steering system in the near future. As per the automotive consumer survey done by Deloitte, around 71% of consumers in Germany give preference to vehicle safety than the other features of the vehicle. This would attract more customers to adopt electric power steering system for their vehicles.

Moreover, the key electric steering system technology providing companies in developed countries, such as Robert Bosch GmbH, Continental AG, Magna International Inc., and Denso Corporation are investing in the development of autonomous and connected vehicles. For instance, Robert Bosch GmbH signed an agreement with Mercedes in 2017 to develop level 4 (high automation) and level 5 (full automation) cars. This would increase the adoption of electric power steering system for autonomous and connected vehicles. Automotive electric power steering system manufacturers are focusing on high-end engineering and designing to develop next-generation automotive steering components for the vehicles. Furthermore, vehicle electrification leading to the use of advanced automotive electric power steering systems and government policies to curb vehicle safety encourage the manufacturers to develop newer and advanced sensors in electric power steering system.

Furthermore, the increase in awareness and adoption of advanced electrics in autonomous vehicles results in the need for advanced steering systems, which drives the use of electric power steering system in the global market. Thus, the rising adoption in developed countries is expected to create opportunities for the global electric power steering system market during the forecast period.

An electric power steering comprises multiple components and subsystems, such as the motor, reduction gear, torque sensor, and a module that collects and sends out information, among others. The operational cost of electric power steering system depends on various factors such as advanced technology and vehicle type. The working operations of electric power steering system are expensive owing to the high investment and repair & maintenance costs involved in the generation of advanced technology. The costs associated with the design, development, and manufacturing of such components is higher than alternatives such as steering by wire system, rear wheel steering and hydraulic steering system. Additionally, the sensors used in steering, also adds cost to overall steering system which is not affordable for financially average people. Furthermore, the components and materials used in the driver assistance technology systems must be selected as per international standards such as the American Society of Mechanical Engineers (ASME) and Society of Automotive Engineers (SAE). This leads to an increase in the cost of high-quality raw materials and components used in the manufacturing of electric power steering systems. All these factors are expected to add to the cost of the electric power steering system. Therefore, the high cost forms a restraint to the growth of the global electric power steering system market during the forecast period. Additionally, the complex product design and higher manufacturing cost of electric power steering system systems than the alternative systems are acting as a barrier for new market players. This results in increased prices due to low supplier concentration in the end market. electric power steering system require periodic service and maintenance, and the availability of skilled workforce needed for servicing and maintaining the systems in developing countries, is limited. The cost of electric power steering system increases the overall vehicle cost, which is expected to hamper the growth of the global electric power steering market during the forecast period. However, key electric power steering system manufacturing companies strategize to low down the production cost and invest in the improvement of electric power steering system aftermarket services

The high cost of the electric power steering system currently has high impact on the demand for electric power steering system in many price sensitive countries from Asia-Pacific, and the Middle-East & Africa regions. However, the increasing spending capacity and the increasing product development activities are expected to decrease the impact of high cost of the system on the adoption of electric power steering system in automobile towards the end of forecast period.